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Alibaba invests in SingPost, eyes JV to tap SE Asia’s e-commerce market

Chinese e-commerce giant Alibaba Group will invest in postal service provider Singapore Post Limited (SingPost) and step up a joint venture to tap into the e-commerce opportunities in Southeast Asia, SingPost said on Wednesday.

According to their agreement, Alibaba Investment Limited, a wholly-owned subsidiary of Alibaba Group, will invest SGD312.5 million (USD249.1m) to purchase 30 million existing ordinary shares held in treasury by SingPost and 190.096 million new ordinary shares and take a 10.35 percent stake in SingPost upon completion.

Both companies also signed a memorandum of understanding (MOU) which will allow them to discuss and negotiate a joint venture (JV) in respect of the business of international e-commerce logistics.

The collaboration is intended to allow SingPost Group and Alibaba Group to cooperate and leverage each other’s strengths and experience to create a platform for international ecommerce logistics business, giving priority to SingPost Group’s logistics services based on commercial terms.

It aims to "achieve full regional value chain of ecommerce logistics including warehousing, last mile delivery, linehaul, customs clearance, parcel collection, consolidation and order fulfilment," the two companies said in a statement.

Under the collaboration, Alibaba Group will not only able to have access to SingPost Group’s international logistics capabilities, infrastructure, and delivery networks including potential regional roll-out of POPStations, but also offer end-to-end solutions to the customers and merchants.

Investment by Alibaba Group enables SingPost to significantly scale up its regional capabilities and infrastructure to meet growing e-commerce demand. SingPost’s e-commerce and related businesses currently account for about 26 percent of its total revenue. The collaboration enables SingPost Group to benefit from Alibaba Group’s expertise in e-commerce and business volumes.

Over the next few months, the two companies will also continue discussions on the formalisation of a joint venture (JV) in respect of the business of international e-commerce logistics.

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